Calif. Lawmakers Find Ways To Beat Equity Mandates

After creating an equitable school-funding formula, California
politicians have found a way to get around their own system.

Legislators have learned to use the education programs that fall
outside the funding formula to steer more money to their constituents,
a new report concludes.

The formula divides the bulk of the state's $14 billion in K-12
school funds with an eye toward increasing equity between wealthy and
poor districts. So lawmakers interested in making sure that a larger
share of the state's money winds up in their districts have found
reason to assert themselves, argues Thomas B. Timar, an associate
professor at the University of California at Berkeley.

Over the past two decades, the number of categorical
programs--initiatives like desegregation funding, reading programs, and
dropout-prevention efforts--has mushroomed. Mr. Timar's analysis of the
phenomenon demonstrates how both Republicans and Democrats have
embraced such programs as a way to escape the frustrating uniformity of
equity.

"Insofar as Republicans represent largely suburban and rural
districts, their strategy has been to devise new categorical programs
that would benefit their districts,'' Mr. Timar says in his report,
which was published in the summer issue of Educational Evaluation and
Policy Analysis. "Democrats, on the other hand, have fought to keep
their share of categorical funding to urban constituencies from
eroding.''

The result, the report concludes, is a proliferation of small state
education programs. In 1980, the state had 19 such programs. By 1991,
the number had jumped to 70. Their share of the state school budget
more than doubled over the same time.

Further, Mr. Timar concludes, lawmakers' efforts to cash in on
categorical programs are now to blame for most of the inequity that
still exists.

Urban and Suburban Aid

In particular, desegregation aid has proved a boon to urban
districts and a favorite of Democratic legislators.

The California program helps reimburse districts for costs stemming
from either court-ordered desegregation plans or voluntary efforts.
Yet, Mr. Timar says, an analysis of the program clearly shows how it
helps some districts more than others.

In 1990-91, about 43 percent of the students in the Sacramento City
Unified School District were black or Hispanic. In the San Francisco
Unified School District, 38 percent of the students were from the same
minority groups. Yet, in that year, Sacramento received $14 per student
in desegregation aid, while San Francisco received $1,126, according to
the report.

Los Angeles, San Bernardino, San Diego, and Stockton--original
participants in the desegregation-aid program--have been the biggest
winners.

"The success of relatively few urban districts to capture a
disproportionate share of state school funding is attributable, in
large measure, to benefits from centralization of the state's finance
system,'' he argues.

On the other hand, suburban and rural districts have found relief in
the state's supplemental grants program, an initiative that Republicans
in the state Assembly were able to enact as part of a legislative
compromise in 1989.

Limited Impact

When the lawmakers saw state aid going disproportionately to urban
districts, the lawmakers called for a fund that would set aside some
state money for districts that receive less than the state average from
other categorical programs.

"This funding strategy sets a new standard in public finance for
irrationality,'' Mr. Timar says.

"There is no policy rationale justifying this type of revenue other
than the desire to give more moeny to suburban districts at the expense
of urban districts,'' the University of California professor adds.

In the end, California finance experts note, overall funding does
not stray far from the state's equalization targets.

"Nobody has gotten so much money that you could say that politics
are driving the categorical programs more than the real needs of
kids,'' Kevin Gordon, a lobbyist for the California School Boards
Association, said in an interview.

In passing the budget for fiscal 1995 this summer, lawmakers
appropriated about $500 million for desegregation aid and $179 million
in supplemental grants, the same amount provided for those programs
last year. The state's overall budget for K-12 education totals about
$14 billion.

While the situation does not threaten the overall equity of
California's school-finance program, however, it is a side effect of
centralized school funding that bears watching, Mr. Timar says.

He notes that the response of lawmakers in California may signal new
political tactics in addressing school-finance equity.

"Increasingly, decisions about local expenditures--how much to spend
on new programs or staff development, for instance--are made at the
state level,'' Mr. Timar writes.

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